Philippine Daily Inquirer
8:29 am | Sunday, February 2nd, 2014
MANILA, Philippines—A party-list representative is seeking a House probe into the alleged gross mismanagement of the state-owned Home Guaranty Corp. (HGC), which has incurred P13.3 billion in losses in the past decade.
Abakada Rep. Jonathan de la Cruz. CONTRIBUTED PHOTO/www.congress.gov.ph
Abakada Rep. Jonathan de la Cruz filed House Resolution No. 730 directing the committees on good government and public accountability, housing and urban development, and government enterprises and privatization to investigate present and past officials of the HGC for driving the firm into bankruptcy with their alleged ill-timed bond flotations dating back to 2002.
According to De la Cruz, these losses had “hampered [the] HGC’s ability to perform its mandate” to facilitate home lending to socialized and low-cost housing.
He cited a Commission on Audit (COA) report noting the HGC’s “diminished capability to provide guarantees for loans supporting a viable shelter program.”
De la Cruz said the HGC had further compounded the government’s fiscal problems, particularly after the government had to pump P12 billion in emergency funds to the corporation to avert a default on a maturing loan, specifically the P12-billion zero-coupon bond flotation.
“There is a need to pinpoint responsibility for the tottering HGC finances, which, if left unresolved, may result in its actual bankruptcy, endangering the entire banking and financial system, and ultimately burdening the entire Filipino people,” said De la Cruz.
De la Cruz said the COA had been making repeated calls for the HGC to fix its finances, including to collect on its billions of pesos in receivables, which the company has ignored.
“It really boggles my mind why the HGC, despite its condition, does not want to collect its more than P1 billion from the NHA (National Housing Authority) when all it has to do is submit documents, as disclosed by the NHA itself. But it has not done so. What is keeping it from doing this?” De la Cruz remarked.
De la Cruz cited COA supervising auditor Teodora Lacerna’s report noting that the HGC’s deficit operations began when it binged on zero-coupon bonds.
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Tags: Abakada Rep. Jonathan de la Cruz , Bankruptcy , bond flotations , Commission on Audit , HGC , Home Guaranty Corp.
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